The policy-making body for the tax department said raids and survey operations were undertaken on December 3 at 39 locations in Mumbai, Kolkata, Kanpur, Delhi, Noida, Gurugram, Hyderabad and Ghaziabad.
The action was taken against brokers and traders who were involved in facilitating accommodation of profits/losses through reversal trades in illiquid stock options in equity derivative segment and also currency derivative segment on the BSE, the Central Board of Direct Taxes (CBDT) said in a statement.
"The action has unravelled the entire modus operandi which has been adopted by share brokers and traders to trade into the liquid stock options in equity derivative segment and thereby generate artificial losses/profit by executing reversal trades in a very short span of time," it said.
"By this contrived methodology, the unscrupulous entities have secured desired profits/losses, which is estimated to be more than Rs 3,500 crore," the CBDT said.
The action also resulted into identification of the wrongful long-term capital gains taken in at least three penny stocks listed on the BSE, where the manipulated profits utilised by the beneficiaries aggregate to around Rs 2,000 crore, it said, adding that unaccounted cash of Rs 1.20 crore was also seized after the raids.
The number of beneficiaries who have been benefitted by these manipulated transactions could be to the tune of a few thousand scattered across India and efforts are being made to identify them as also the corresponding quantum of income evaded, the CBDT said.
"Incriminating" evidence recovered during the searches and surveys is being examined for determination of contravention of the various direct tax laws, it added. NES SNE SNE